NCLT allows Jet Airways to sell office in Mumbai's Bandra Kurla Complex

The NCLT has allowed Jet Airways to sell its premises in Bandra Kurla Complex (BKC) to settle Rs 360 crore dues of mortgage lender HDFC, clear overseas debt and cover corporate insolvency resolution process costs.

Jet Airways' insolvency resolution professional Ashish Chhawchharia had moved the NCLT to seek approval to sell its third and fourth floor in Godrej BKC building to clear overseas debt to transfer the title of six aircraft under Export-Import Bank of the US to the corporate debtor, which would help in maximising value of the defunct airline.

The insolvency professional had sought permission of the tribunal for the sale of the premises after a resolution was passed at the 10th committee of creditors (CoC) meeting held on April 24 with approval of 74.45 per cent votes.

The Principal Bench of NCLT in its order on June 11 granted permission to the grounded airline to sell the premises for utilising the proceeds to settle Rs 360 crore dues of HDFC, as against the mortgage lender's claim of Rs 424 crore.

The property is non-core asset of the grounded airlines, which was never used by Jet as part of its airlines business, the order said.

The lenders have kept the reserved price of Rs 490 crore for the property, it added.

Auction for the same is expected to take place on June 26, according to sources.

The order further said that the US Exim Bank holds a charge over six aircraft, of which cumulative depreciated value is over $200 million.

"If the amount payable to US Exim is not paid, US Exim will become entitled to repossess the six aircraft. The US Exim bank has agreed that upon the payment of $13 million (approximately Rs 90 crore), it will transfer the title of six aircraft to the corporate debtor," the order said.

Therefore, after this payment to the US Exim, the defunct airlines can add six aircraft to its fleet which is around $200 million (around Rs 1,400 crore), the six-page order added.

The cash-strapped airline, which was grounded in April 2019, owes more than Rs 8,000 crore to banks, with public sector lenders having significant exposure.

The National Company Law Tribunal (NCLT) Mumbai-bench had on June 20, 2019 admitted the insolvency petition filed by the lenders' consortium led by State Bank of India against Jet Airways.